Saturday, October 17, 2009

Risks, Actions, and Benefits

Partially a response and clarification (at least I think it's clearer) to the strategies presented in Alicorn's post on Less Wrong, The Shadow Question. One of the big problems in her discussion of strategies is the conflation of up-front costs with risks.

"First, Do No Harm": When it is as easy to make things worse as better, be damn sure you know what you're doing before you start fixing things.

"Cherry on Top": An invitation to fiddle; small changes are very unlikely to make things worse, and may help.

"Lottery Ticket": She talks about a risk of making things worse, but it looks more like (from her examples and general discussion) that she means is an upfront cost with a chance of significant benefit later.

Insurance: The other headings were hers, but the one she uses here is misleading, as is her discussion. This is related to "Lottery Ticket" in having upfront costs, but in this case it's to prevent an unacceptable risk of harm. It can be something as simple as insuring your house against fire, so you have a temporary place to live and your house gets repaired (or you get a new house if that's easier/cheaper). To actually working to make a risky future less likely (for example, working on Friendly AI).

Another strategy mentioned by Morendil in a comment is "Go for broke" (a less functional version of this would be Russian Roulette), a big risk with the chance of a big reward, like First, Do No Harm, but higher potential risk/payoff matrix.

First, Do No Harm - Use knowledge to avoid as much risk as possible while still seeking the reward

Go for broke - Straightforward acceptance of large risk with large reward

Cherry on Top - Seek benefits at minimal risk

Lottery Ticket - Pay an up-front cost for a small chance at a large benefit

Insurance - Accept an up-front cost to hedge against a risk

Adventure sports isn't a risk management strategy, I mention it here because it feels like there should be a benefit - Seek the thrill of risk, while reducing actual risks, and not getting any benefit except the thrill

If you think of any other generic strategies, please leave a mention in the comments.

As an aside:

As for the title of the original post, I had to Google "Shadow Question". I don't watch television and have never seen an episode of Babylon 5. Given the page I found that describes the show, that was no loss. But the "two questions", "Who are you?" is the Vorlon question. "What do you want?" is the Shadow question. I guess you could call the first one silliness, and the Shadow question practical.